Part 2 (1000 words) due end of week 11
Analyse the macroeconomic environment and analyse the effect on the firm. Select a microeconomic (macroeconomic) concept/framework/model to apply to that organisation and identify major problems.
Part 3 (10 minutes presentation) due in week 12 in the classroom
Prepare a power point presentation and present in the classroom
WOODSIDE MULTINATIONAL COMPANY Executive Summary This is an evaluation of Woodside Petroleum, an Australian-based oil and gas company, based on microeconomic principles, framework, or model. Woodside Petroleum Ltd. is the main or parent firm of the Woodside group of enterprises. It is expected that references for the entire year will be included in this report, with different concepts and frames being used to do so. This section provides an overview of WOODSIDE PETROLEUM's whole corporate structure. It's built to fulfil all compliance and governance standards and to make it simple to see how the company has performed in the market. As a publicly traded corporation, the firm is listed on the Australian Securities Exchange. The business sells petroleum products, including LNG and crude oil. The firm is the largest in Australia by market value at $28.58 billion and one of the world's major oil companies. Other oil firms, such as Santos, Shell Australia, and Exxon Mobil, are close behind it in the market. Table of Contents Introduction4 Selection of a Multinational Public Company4 Description of Company4 Industry Analysis5 Apply Microeconomic Concepts.5 PESTEL Analysis5 Demand and Supply Analysis7 Elasticity and Revenue8 Emerging Markets and Multinational Companies9 Conclusion9 References10 Appendices11 Introduction Woodside is the world's largest independent oil and gas producer. It's an Australian non-profit. This is the firm recognized for its world-class abilities as an energy explorer, developer, producer, and supplier. An important goal is regaining our position as a global oil and gas leader by providing the highest shareholder returns possible. The safety, durability, and efficiency of Woodside's goods have made them a household name. Liquefied natural gas, or LNG, is a term that refers to the liquid form of natural gas. They supply 8% of the world's LNG needs. Because they have a low-cost energy provider technique and a long-term business plan, they are a good fit. We help emerging markets have access to low-cost energy. They believe that in order to reduce costs and open up future development, innovation and development are critical. Organizations are now leading the way in remote assistance, automated thinking, and more scrutiny of our work. Woodside understands that maintaining long-term and significant relationships with organizations is critical to maintaining our permission to operate, therefore we strive to create ties that benefit everyone. Solid well-being and ecological execution in all areas are displayed by Woodside as being dynamic and focused on preserving our traits of trustworthiness, respect, working sensibly and training. Selection of a Multinational Public Company A locally-owned and publicly traded corporation, Woodside Petroleum Ltd is a multinational public company that makes money through hydrocarbon exploration, evaluation, development, production, and marketing. In Australia, the firm trades under the symbol WPL. Through: continuous improvement, resources located near growth markets, cost-consciousness, and the delivery of products and services through innovation in technology or diverse goods, they aim to retain their competitive edge. Description of Company Perth, Western Australia-based firm employs around 3,700 employees. It works in 15 countries across the world and is headquartered there. Woodside Petroleum Ltd. is a petroleum exploration and production business based in Australia that was founded in 1989. Woodside is Australia's biggest independent oil and gas business and the country's largest oil and gas producer. Perth, Western Australia's headquarters, is a publicly traded business on the Australian Securities Exchange. Woodside Petroleum was rated as the 1328th largest public business in the world in the 2020 Forbes Global 2000 (Anderson, 2021). Petroleum and LNG are the company's major products. Besides Australia, Woodside has exploration, development and operations in Canada, the United States, Senegal and South Korea. It also has operations in New Zealand and Myanmar, as well as in the countries of Gabon, Morocco, the Republic of the Congo, and Ireland. Several liquefied natural gas (LNG) projects are being developed or operated by Woodside in Australia. As well, Exmouth, Western Australia's Enfield and Vincent oil fields are operated by the firm. Industry Analysis Exploration and development prospects in Australia's petroleum sector were pioneered by firms with a long-term view to benefit their shareholders and Australia. Due to the recent downturn in exploration activity in Australia, both major and small firms are increasingly exploring overseas in regions with more potential. Delays in production owing to a lack of market demand for big gas finds have led to the notion that Australian exploration is less appealing than other foreign nations because to the poor prospective for oil and the absence of market demand for Australian gas. Woodside's market structure is oligopolistic, meaning that it has only one competitor. Imperial Oil, Tamaska Oil and Gas, Samson Oil & Gas, and Carnarvon Petroleum are some of Woodside Petroleum's main competitors. Woodside Petroleum has a market capitalization of $14.49 billion as of September 2021 (Jennings, 2021). According to our statistics, this makes Woodside Petroleum the 1252nd most valuable business in the world. If you want to find out how much a publicly traded company's stock is worth, you may look at its market capitalization, sometimes called market cap or market value. Apply Microeconomic Concepts. PESTEL Analysis Political Overview The influence of political variables on Woodside Petroleum Limited's long-term profitability in a particular nation or market is considerable. With more than a dozen nations under its belt, Woodside Petroleum Limited is exposed to numerous sorts of political environment and system risks. Diversifying the systemic risks of the political environment is essential to achieving success in such a dynamic Energy business across several nations and continents (Robertson, 2020). Economic Overview Macroenvironment variables such as inflation rate, savings rate, interest rate, foreign exchange rate, and economic cycle affect aggregate demand and aggregate investment in a country.... Because of competition standards and other variables that affect the firm's advantage in the marketplace. Energy industry growth rate and consumer spending data may be used by Woodside Petroleum Limited to estimate growth trajectory. Social Overview Cultural norms and ways of doing things have an influence on organisational culture in a given context. According to Woodside Petroleum Limited's marketers, shared ideas and attitudes play a major part in understanding clients in a specific market and crafting the right marketing message for Energy industry consumers. Technological Overview Technology is rapidly affecting a wide range of businesses. The transportation business is a fantastic example of how this may be demonstrated in the real world. In the previous five years, the sector has seen a rapid transformation, which hasn't even given the established firms a time to adapt. Technological study of an industry should not just include the pace with which new technologies affect that sector. Slow pace will allow a business more time to adapt and be profitable, but rapid technology disruption may provide a firm less time (Lyall, 2020). Environmental Overview In various markets, there are varying regulations or environmental requirements, which might affect a company's profitability. State environmental regulations and liability rules might differ even within a country. There are different responsibility clauses for mishaps or environmental disasters, for example, in the United States. Numerous European nations also offer generous tax incentives to firms in the renewable energy sector. Legal Overview A lot of nations do not have a legal structure and institutions that are strong enough to defend an organization's IP rights. Considerations for Woodside Petroleum Limited's leadership when entering a new market include anti-trust laws in the Energy business and generally across Canada, Copyright, patents, and intellectual property laws, consumer protection, and electronic commerce, employment, and health and safety laws, and data protection. Oligopolistic firm is neither the price taker nor the price maker. It is obvious that the oligopolistic firms make strategic price decisions by considering the prices set by the competitors (Toleman & Cullen, 2021). Eventually pricing aspect of the firm can be solved by Cournot, Stackleberg and Bertrand model of pricing. The market signaling system works somewhat differently when the prices are administered by the oligopolistic firm. Changes in the prices in the market signal changes in the market conditions for input also. This leads to price wars among the oligopolistic firms persisting in the market. A strategic price decision means that the firm takes an explicit account of the impact of the decision of the competitors and the reactions. Demand and Supply Analysis Oil industry is an economic powerhouse and it is significant to note that movement in the oil price affects the other sectors of the economy. Changes in the oil prices can initiate shock waves in the economy because it is one of the essential inputs in the economy. The supply and demand of oil is effectively reflected in the price. Woodside Petroleum reflects a considerable increase in the demand of oil in the second quarter of 2020 when the price fell from 52 Australian dollars to 30 AUD (Bainbridge, Wainwright & Hathway, 2021). However, in the following quarters even though the price increased considerably the demand and the sales of oil increased because of the inelastic demand of oil. From, the table we can certainly specify that the equilibrium price of Woodside Petroleum lies between 30 Australian dollars to 45 Australian dollars. 2020 (Quarter) Supply (Production) Demand (Sales) Price Q1 1,831,966 1,572,338 52.15 Q2 2,534,998 2,432,409 30.42 Q3 2,487,510 2,710,878 45.372 Q4 2,848,718 3,007,376 50.87 The demand of the oil is determined by the price (P), income level of the economy(Y), production level in the economy (Q) and the population of the economy (N) D= f (P, Y, Q, N) The Supply of the oil in the economy is determined the price (P) and availability of oil crudes (O_C). S= f (P, O_C) Elasticity and Revenue The striking feature of the oil market is that in the short run it has a inelastic demand. This means that even if the price changes there is a very minimal or no change in the demand of the oil. Inelastic demand of oil in the short run usually means that the revenue increases when price increases in the short run. However, in the long run the firm exhibits an elastic demand. This is a significant feature of the oil industry. At this stage a further increase in the price usually reduces the revenue as the demand decreases due to the increase in price. This differences in elasticity in short run and long run can be used to determine the pricing strategy of the firm. It is obvious that in spite of